Ethiopia: New Authority to Regulate Petroleum, Its Business

The House of People's Representatives (HPR) has approved a draft legislation for the establishment of Petroleum and Petroleum Products Supply and Distribution Regulatory Authority. First tabled before the House in April this year, entitled, 'a Proclamation to provide for the Establishment of Petroleum and Petroleum Products Supply and Distribution Regulatory Authority, was referred to the Trade and Industry Affairs Standing Committee for further revision.

During a regular session held on Tuesday, the House heard the standing committee's report presented by its chairman, Getachew Melese.

While presenting the report, the chairman explained the major revisions and resolutions that were carried out over the past one month.

Getachew told MPs that the committee unanimously found the proclamation to be timely; adding, they agreed that the laws bring an important legal framework to help structurally regulate petroleum and its products, considering its crucial share of contribution to the country's economy and social activities.

It is to be recalled that until the latest proclamation authorizing the establishment of this new organ came to fruition, petroleum and its supply, and its distribution business were under the regulation and supervision of the Ministry of Trade (MoT). However, according to the proclamation, the authority is still accountable to the Ministry of Trade.

The Authority is responsible for preparing directives necessary for the implementation of this Proclamation and submit it to the Ministry for approval. And upon approval by the Ministry, it notifies the concerned bodies, of the issuance of such directives, and follow-up on the implementation of the same.

It is responsible for ensuring supply and distribution of petroleum and petroleum products are conducted in compliance with lawful trade practice.

Furthermore, it will take the appropriate punitive measures against any participants who are involved in or commit unlawful acts in relation with the supply and distribution of petroleum and petroleum products, and give solutions to problems encountered in relation to such activities.

Similarly, the authority is granted the power of revising, at least monthly, the wholesale and retail prices of petroleum and petroleum products as well as transport oil and lubricants, considering its impact on end users. But it is required to submit the revised price to the Ministry for approval.

In addition, it has the mandate to revises the profit margin of persons engaged in the supply and distribution of the products as well as the transport tariff as may be necessary, and submit the revised profit margin or tariff to the Council of Ministers through the Minister for approval, and implement it upon approval.

In addition, it will further determine the kind and quantity of petroleum and petroleum products to be held in reserve, give the necessary support for effective and efficient petroleum reserve administration, and construction of petroleum storage depots in collaboration with the appropriate bodies.

What's more, in addition to the price revision and follow-up, the authority is tasked with setting procedures and mechanisms supported by modern technology to facilitate the supply and distribution of petroleum and petroleum products.

Meanwhile, the activities of conducting studies and researches useful for the development of petroleum and petroleum products industry subsector, are also its responsibilities listed in the proclamation, among others.

After a longer and a heated debate, the House passed the draft bill with a majority vote while one MP abstained.

Ethiopia spends more than USD 2.8 billion every year to import fuel. It imported 3.8 million metric ton last year alone.

In the same session, the House has conducted a firsthand debate on the new draft regulation that would help to implement the Proclamation provided for the Re-establishment of the Ethiopian News Service. The House then referred the draft regulation to the relevant Standing Committee.

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